Knowledge Resources

Does Being Emotionally Intelligent Pay?

The appeal of emotional intelligence continues to be evident among researchers and practitioners. There has been a near-exponential increase in the number of training programs and scientific studies on emotional intelligence since the introduction of Daniel Goleman’s book, Emotional Intelligence: Why It Can Matter More than IQ in the mid-1990s. Emotional intelligence is the ability to recognize emotions and their effects both within ourselves and others. Individuals who are emotionally intelligent are also able to employ skills that allow them to better manage emotions and to use those emotions to facilitate effective and desirable outcomes. Despite some initial debates among scholars about the validity and practicality of emotional intelligence, existing research evidence suggests that emotional intelligence is both a valid and practical concept. Valid in that emotional intelligence is distinct from, say, cognitive intelligence (IQ), or as personality trait, and practical in that emotionally intelligent individuals and teams have been shown to perform better towards meeting personal and professional goals.

Yet, questions remain regarding the financial value of emotional intelligence. Can being emotionally intelligent help you earn a better salary? From an applied, business perspective, we could ask a similar question: Is training staff to increase their ability to perceive and harness emotions actually going to benefit the bottom line? Such questions have real-world implications – organizations investing funds for training of staff emotional intelligence should expect to see financial payoffs. At least one study has shown this to be the case. Sampling from different banks in Australia, researchers found that a bank relationship managers’ emotional intelligence was positively associated with their client’s trust. Specifically, when relationship managers were better able to perceive and manage emotions with their clients, they enhanced their client’s trust in them. The bank’s financial performance subsequently benefitted as a result of this trust, showing that skills related to perceiving and regulating emotions of others – two important subskills of emotional intelligence, does lead to a financial payoff for the organization [1].

Several recent studies also suggest that it does pay to be more emotionally intelligent. When Tassilo Momm and colleagues sampled more than a hundred employees from various organizations in Germany, they found that one particular subset of emotional intelligence – emotion recognition ability (ERA), was associated with how much an individual earns yearly. When employees were better at recognizing emotions in others, they were also rated as being more politically skillful and as being better at facilitating interpersonal relationships with others. Both political skill and interpersonal facilitation ratings for this study were provided by peers – suggesting that these were objective indicators of an employee’s abilities. The researchers conclude by stating that employees with higher levels of ERA were better able to recognize emotions in others, and use this to guide their interactions with others – eventually leading them to be more highly valued and rewarded by their organizations. This finding is made all the more convincing considering that the researchers ruled out factors such as age, gender and work experience in their study [2].

Another study, this time conducted by Joseph Rode and colleagues, also assessed whether emotional intelligence is positively associated with salary. The researchers used a time-lagged design – they first tested college students’ emotional intelligence ability sometime between 2001 and 2003 (Time 1), when the students were taking an introductory organizational behaviour class. Rode and his team then followed up with the same students 10-12 years later – this time when they were full-time employees (Time 2), asking them for their salary and whether at present, they had a career mentor. As with Momm’s study, Rode and colleagues found that emotional intelligence was significantly related to salary. In contrast, however, they found that it was career sponsorship from the mentor that explained the emotional intelligence-salary link. Graduates who were emotionally intelligent were better able to seek out contacts and parties during their careers. This in turn helped enhance their career progression and eventually lead them to more financial rewards. The researchers referred to these mentors as a form of ‘social capital’ – individuals who were able to provide the necessary resources, support and development opportunities for career success. The findings here further coincide with yet another study, conducted by TalentSmart, an organization that provides emotional intelligence training. They found that emotionally intelligent people make an average of $29,000 more per year more than people with low emotional intelligence, further evidencing claims that the emotional intelligence is positively associated with salary [4].

All in all, the findings suggest that it is what emotional intelligence helps us do – enhance our relationships and interactions with others – that leads us eventually to increased financial gain. Whether it is by helping us navigate our social and professional environments more, or in seeking career mentorship, emotional intelligence pays dividends – both socially, and financially.